According to a report from Bloomberg the world’s largest mining company could be in the making. Citing people familiar with the situation, Bloomberg reported that Glencore Plc is exploring the possibility of merging with Rio Tinto Group. If a merger of the companies were to come to fruition it would create a mining company worth an estimated $160 billion.

The first step taken by Glencore, which merged with Xstrata in 2012, was to reach out to Aluminum Corp. of China, the Chinese state-backed company that is Rio Tinto’s largest shareholder. Glencore wanted to gauge its interest in a potential deal, said two of the people, who asked not to be identified because the matter is private. The discussions with the company, which is known as Chinalco and controls about 9.8 percent of Rio Tinto, reportedly took place in recent weeks.

No talks are underway between the two companies, no formal offer has been made, none is likely before the end of 2014, and Glencore could decide against an offer, the sources said.

A merger would catapult the combined company past BHP Billiton Ltd. to become the largest mining group, combining Glencore’s vast commodity-trading operations with Rio Tinto’s portfolio of iron-ore projects that feed demand for construction materials in China.

Spokesmen for Glencore, Rio and Chinalco declined to comment.

For Rio Tinto, the time may be right to move toward a deal because of persistent weakness in the market for iron ore, which accounts for almost half of Rio Tinto’s revenue and is weighing on its share price. The cost of iron ore has plunged about 41 percent this year due to a glut from giant new mining projects and relatively sluggish economic performance in China, the world’s biggest single market.

Additionally, with Rio CEO Sam Walsh likely to retire by the end of next year, Glencore sees an obvious opportunity to avoid a battle over who would run the combined company, two of the people added.

Any offer would consist primarily of shares in Baar, Switzerland-based Glencore with some cash, and the company isn’t interested in a hostile deal, Bloomberg reported.

A merger proposal would face several additional obstacles. While Rio’s managers aren’t implacably opposed to a tie-up with Glencore, they believe the slump in iron-ore prices would put the company at a disadvantage in negotiations, two of the people said. For that reason, their first response to an offer will almost certainly be a rejection, the people said.